08/04/2014 – Monthly Financial Report

June 2014 Financial Report

Dr. Michael Bell (CFO – Chief Financial Officer)
You have the financial report ending June 30, 2014 which is of course end of the fiscal year.  On the front you’ll notice this is a draft for the year end closeout.  We are going through the process of putting in the payables and making the appropriate adjustments.  We are moving toward the final position of the FY14 budet.  I’ll speak for what’s in front of us which is substantially complete.
Page 1
Amended budget is $764 million.  We’ve collected YTD $781 million.  There are some adjustments to come in, but we’ve expended $752.7 million.  On the face of it we have some up sides on the fund balance.  In the T-Sheets for the FY15 Budget, we’ve projected a $20 million dollar fund balance.  We are hoping to exceed that as we go through the accrual process in closing the books on FY14.
Page 2
In June we collected $48.7 million.  We spent $71 million (page 8).  Not unusual, but if these trends continue we’ll have problems qualifying for TANs.
Page 3
Total revenue is 2.2% over projected at $781 million.  Local revenue was 4.4% over and state revenue is .7% under projected.
Page 13
Operating surplus is $32 million.  As we close the books there will be some additional expenses and some incoming revenue as we go through July and August.
Page 34 – Variance Report
We’ve collected 102.2% of expected revenue and spent 98.5% of budget.
We will be updating this document.  We are in the process of closing the books.
John Coleman – This is great.  Some benefits are running over the amended budget.  Will the 2015 budget accurately reflect the expected payments of benefits given our under estimation this year?
Bell – Yes.
Coleman – The only other area we are over budget is school administration.  We are a few percent over.  What caused that and is it reflected in the 2015 budget?
Bell – I don’t know.  We are looking into that.
Jim McMahan – When will this be finalized?  The DE46 isn’t due until October.
Bell – In a couple of weeks we will be 95% confident relative to its final position.  This report will be used to build the DE46.
McMahan – Page 5 – Please explain in layman terms the instructional salary and salary accrual.
Bell – This report is of June 30.  Our teachers work 10 months but get paid on a 12 month basis.  That 52K is the accruals that have taken place during July and August.  When we close the books out, we will be under on instructional salaries.  We are currently researching where we didn’t spend money on salaries that we expected.
McMahan – Are our teacher contracts dated July 1?  Are we currently accruing salaries for FY15?
Dr. Tekshia Smith Ward (Chief Human Resources Officer)
Yes.  Teacher’s salary they are currently receiving will go through Aug 30, 2014.  The paycheck for a teacher that starts today will not come until Sept 15.
Thad Mayfield – Page 4 – Beverages – This number has consistently been lower.  I would expect those numbers to be higher given Sunday sales.  Have the formulas been updated?
Bell – The percentage that the school board takes, the formula has not been adjusted for Sunday sales.  During the debate over Sunday sales, there was the concept of displacement.  In layman’s terms, people were stocking up for Sunday.
Mayfield – Page 4 – Transportation receipts is almost 300% over what was expected.
Bell – Very good question. The original transportation numbers are what were put in there by the transportation division.  As we went through time, they had generated more revenue say from field trips and that type of thing.  They asked based on certain needs that additional money be budgeted for them.  I think we did something like that at mid year.  That’s what you’re seeing.
Mayfield – This uptick is from field trips … it’s essentiall y what is generating this revenue?
Bell – They performed a lot more in field trips than they originally anticipated.
Mayfield – There’s a large swing in projecting transportation revenue.
Bell – From the original budget to the amended budget, $10 million went from the other category to the taxes-property category.  It was just a transfer in categorizing the money.
Mayfield – I’m talking about the large swings in performance from year to year.  We are generating revenue that we don’t have a handle on projecting.  It was $2.3 million last year and $4.6 million this year.  That seems like an inordinate number of field trips.
Bell – Good point.  We’ll have to talk to transportation about those field trips.
David Campbell – Great job on managing the budget.  Page 1 – fix the formatting.
Page 4 – What is the $1 million dollar insurance recovery.
Bell – That’s the insurance payment received on the claim of a partial burning of Hooper Elementary.
Campbell – Page 14 – Year end accruals.  Are those RESERVE categories accruals?
Bell – They are correct at this point in time. We projected possible payables of about $7 million dollars.  Payables will certainly come later that will be booked back to this year.
McMahan – Page 14 – Encumberances and Prior Year Adjustments – The $236K under K-12 is that the after year end adjustment?
Bell – This is a number that’s been on the report since the beginning of the year.  I’m not sure exactly what it is.  It is items that came in from FY13.
McMahan – Page 4 – Where on the revenue side … this is the first year we’ve had a birthday tax for cars.  Where does that go?
Bell – It goes under local sources – taxes – property.  Part of it is sales tax and part of it is ad valorem.